The waste crisis devastated tourism in Lebanon, but there is still opportunity to recover, argues Michel Pharaon.
- Is it correct to say that the year 2015 seemed to be going well for tourism until the momentum crash-landed when the waste management crisis erupted in the summer and protests ensued?
We were in Dubai for an Arab ministers’ meeting in May and the secretary general of the United Nations World Tourism Organization (UNWTO) praised Lebanon [for hosting] an increase of 15 to 20 percent [in the number of tourists] in the first quarter, and this was remarkable.
This continued throughout the year and the [Banque du Liban (BDL), Lebanon’s central bank] praised this activity as well. Not only did the number of tourists increase but during the first trimester the number was even higher because we had what we didn’t have the year before: during the mid-season holidays in February in the Gulf, Lebanese expats came in high numbers. Today we are working to increase the [number] of expats coming to Lebanon because the UNWTO considers expats tourists when they are out of the country for more than three months.
I will tell you directly that political tensions did not affect tourism – although without them we would have been doing a lot better – but they didn’t affect development in 2015 compared to 2014 and 2013.
What affected it dramatically was the waste problem. I will show you just one graph of tourist spending in July [based on VAT returns]. We are not talking about something little; we are talking about a 45 percent increase year-on-year, which was great. What’s remarkable is that on July 25, at the height of the waste problem, Lebanon started to appear in global media outlets, including in the Gulf, and you [can] see on the graph that the decrease was immediate.
When you look at the average spending of tourists, shopping is only 24 percent, so when you see that there is an increase of 45 percent and you have travel, accommodation and entertainment, what we were about to witness this summer was a [spending boom] for two months which was completely smashed at the end of July. It doesn’t mean that activity stopped in August; it continued with all the Lebanese expats, but the thing we were realistically expecting didn’t happen.
- In the context of the waste crisis, purely from a tourism perspective, what would you say was the worst: the waste on the streets or the anti-government protests?
I would say 90 percent [was because of] the waste.
- The factors most talked about in the waste management problem are the cost of building plants and other related expenses, but now you are saying that the opportunity cost of not having a waste solution is actually affecting our GDP. By how much, percentage-wise?
The waste problem hurt us as citizens and as responsible parties, although I am not in the committee for waste [management], and I was really shocked. As minister of tourism I felt the sector was stabbed in the back because there was such an economic opportunity. If you say that maybe it affected tourism since July by a 15 to 20 percent [drop] and if tourism is 10 percent of the whole [economy], then, maybe 1 percent of the GDP [has been lost] since July.
In August we saw exceptional activity, with more than 100 festivals and rural tourism events which lasted until the end of September. We are talking about regions that were full; Jezzine, Ehden [and] Chouf – they were all full at the end of September.
- Can you tell us more about the rural tourism strategy, who it is targeting and what is needed in terms of infrastructure to improve this type of tourism?
Rural tourism is still a small activity, and if we consider that it is 5 to 8 percent of all tourism activity, with the [right] strategy we see that it could easily go up to 20 percent. The emphasis we placed on it created a trend and this trend worked incredibly well in the summer, even more than we had thought, but in fact it’s young people who began to look at it.
The only negative part is that when we first looked at rural tourism, we saw a product which was cheap and could attract people from abroad. We could sell a one-week holiday for less than $900 including the flight ticket because a night at a good quality B&B in rural Lebanon was about $30. Unfortunately the demand suddenly went up and then the offer was not used to address this huge demand. So the price per night went up and now we are talking about $80 to $90 with the same offer which was $35 a year ago.
But when you have more demand than offers, it is an opportunity for people to go into this sector and create products in the region, linking it to the strategy and to the tourism industry. Now it’s more word of mouth, but we are creating a website which will be ready by the end of the year for the guesthouses, so everybody can reserve [online], and we are also working on quality control.
So it’s a small sector which is beginning to get organized and I think we will have success that we can easily encourage, if there is no unrest or waste, not only to the Lebanese expats abroad but also to the European expat community in the Gulf because they are looking for those green products.
- You mentioned an opportunistic price inflation of rural lodgings. Does the ministry have any regulatory power to moderate such developments?
No, we don’t, but we do have the potential to say that it was much more economical at $30 -$35 than at the current $70-$80 [range] to encourage the villages to adopt these kinds of products.
Also, we are studying some kind of micro-financing from the banks because for some people to create a six-to seven-room project in a village, they still need $30,000 to $50,000 to organize things and a little education. So this is part of this strategy; the strategy for five years is developing the role of NGOs and particularly USAID which is doing a lot.
It is a sector where there is activity for the involvement of the municipalities, associations, NGOs and the ministry so something is happening in rural tourism and I am confident we will achieve our target growth rates before the end of the five years.
- Regarding the ability of banks to facilitate rural tourism through loans or investments, is that already happening or is encouraging such financing a project that you envision?
It is happening today but on a case-by-case basis. What we are looking at now is how we can help with this as the ministry, possibly through an association. It’s almost a micro-financing scheme so it needs an association. We think the financing of rural tourism capacities is very important and also believe that the banks cannot really lose if they get involved.
- It almost sounds like something that should be presented to BDL to become part of their Circular 331 promotions.
Yes, absolutely.
- What are some of the ministry’s future plans for 2016?
There are four areas which we will be working on. Two initiatives that are being developed for next year [include] work on the Phoenician Route and on tourism for expats. Plus, whereas 2015 was rural-tourism focused, we are moving on to two new aspects in 2016: medical tourism and religious tourism.
- The Phoenician Route is going from where to where?
The Phoenician Route resembles the Silk Road and it is a project that is going to be taken care of directly by the UNWTO. It is culture that is turned into tourism products. It will take a few years, but it is on the map today and we have decided with the UNWTO to pick three countries as the steering countries for this road: Lebanon, Spain and Tunisia.
- Doesn’t it make your heart bleed when you see the visitor numbers for the National Museum and other museums in Beirut, considering that they have a lot to offer as well when compared with some of the world’s top museums that attract millions of visitors each year?
You’re perfectly right, and we have seen this as we begin to work on attracting Chinese tourists, some of whom didn’t have a clue that Lebanon has a history of 5,000 years, which is something very important to them.
In fact, even this Phoenician project is designed to make the world remember the history of Lebanon. So yes, you are right.
[With regard to] religious tourism, we are talking about more than 1,000 sites which are not protected today and are not highlighted, and resolving this will take a huge amount of work for years to come.
We are trying to turn these cultural touristic sites into jewels and assets to be preserved, and there is huge activity from the ministry of culture behind it. In addition, ecotourism [proponents] are also trying to awaken the region to the importance of preserving the environment, because they see it as a potential income for their region.
So promoting religious tourism, rural tourism and ecotourism may also help to preserve what is left of the beauty of our history and nature, which is unique compared to other Arab countries.
- Do you have other target countries besides China which you are specifically focusing on as places to attract tourists from?
When you take expats, yes. We have the philosophy that every expat should visit Lebanon at least once in their life and be welcomed in a special way; it’s called the Anna program.
In the next [regional WTO meeting] we will also invite two or three countries from every continent to make an event, inviting these countries to talk about their relations with the Lebanese and their status as traditional friends of Lebanon.
